Rexel (RXL) Q3 2024 TU earnings summary

Executive summary

• Q3 2024 sales reached €4,762.3m, up 2.1% reported but down 2.1% same-day, reflecting challenging markets, especially in Europe, while North America showed positive trends and market share gains were achieved in most countries.

• The downturn is attributed to macroeconomic factors and a sharp decline in photovoltaic (PV)/solar sales, though management views this as market-driven and potentially temporary.

• Digital sales ramped up to 32% of total sales, and cost and margin control measures are being accelerated, including significant headcount reductions.

• Management remains optimistic about mid-term prospects, citing ongoing transformation, savings programs, and resilience.

Financial highlights

• Q3 2024 reported sales rose 2.1% to €4,762.3m, driven by a 3.1% M&A contribution, with same-day sales down 2.1% year-over-year.

• Electrification categories represented 22% of sales, down 10.2% in Q3, mainly due to solar and industrial automation.

• Core electrical distribution (ED) business remained stable in volume and improved in price, with cable pricing turning positive (+0.4%).

• Currency effects were -0.3% for the quarter and expected to be flat for the year.

• Digital sales increased to 32% of total, up 254bps year-over-year.

Outlook and guidance

• Full-year 2024 same-day sales expected between -2.5% and -2.0%, with North America flat to slightly positive and Europe mid-single digit negative.

• Adjusted EBITA/EBITDA margin now guided at ~5.9%, with cost savings partially offsetting volume and margin pressures.

• Free cash flow conversion expected above 65% due to lower CapEx and working capital needs.

• Annualized structural savings of ~€45m expected by end-2025 from transformation initiatives.

• Medium-term targets: 5-8% sales growth, adjusted EBITA margin above 7%, high single-digit EPS growth.